Most companies today are hesitant to hire in big numbers for fear of prolonged economic weakness. Not Deloitte Consulting. The consulting arm of Big 4 audit giant Deloitte is currently extending 50 to 60 offers to experienced consultants each week. By June, the company will have hired a total of more than 700 of them. On top of that, over the past six months the firm has brought on board nearly 800 MBAs and undergrads. And Deloitte's HR staff expects to make another 1,000 offers to the class of 2010.
Punit Renjen, a 23-year veteran of the firm and a strategic consultant who stepped up to head Deloitte Consulting in November, sees the firm's growth in a time of economic weakness as "a seminal experience" and a competitive advantage. A number of mid-tier firms have merged or been sold since the recession began. In March, Deloitte, which had consulting revenue last year of $6.5 billion globally, bought the large government consulting business of BearingPoint for $350 million after that firm went bankrupt. That added another 4,000 experts to Deloitte, all in one of the hottest advice markets today. (GovernmentExecutive.com lists BearingPoint's fiscal 2007 government revenue at $516 million.)
Renjen likes to see Deloitte as a "category of one," a consulting firm that can compete against McKinsey in high-end strategy advice but just as easily bid against IBM (IBM) in information technology—and offer pretty much any other service a client might need. That requires a constant influx of new workers, says Tom Rodenhauser, vice-president at Kennedy Information, a Peterborough (N.H.) firm that tracks the consulting industry.
Needing New Blood
The new additions have plenty to do. Last year Deloitte's staff utilization was above 80%, meaning that more than 8 of every 10 work hours were spent on tasks billable to clients. That's a rate that can easily lead to burn out, experts say, and was far ahead of competitors. Kennedy Information estimates that industrywide, only 60% of consulting hours were chargeable to clients last year.
The need for new blood has driven Deloitte to hire where others won't. Many strategic firms don't bring in midcareer experts, preferring to cultivate their own. Deloitte is the exception. The firm also recruits heavily at many schools—such as the Big 10 universities and Carnegie Mellon—where a rival firm might hire only one or two people a year, says Rodenhauser. Deloitte Consulting recruits at 75 different schools across 10 different degree programs, including business majors and specialized degrees, such as HR and public health, says Rick Harrison, who head the firm's HR.
Deloitte recruiters say they're doing better head-to-head against such old-shoe firms as McKinsey and BCG Consulting, both in recruiting and getting new business.
The Appeal of Diversity
Ryan Osborne turned down two other offers when he joined the firm's New York office as a senior manager six months ago. A specialist in life sciences and information management, Osborne had worked at Accenture (ACN) and KPMG Consulting before the latter became BearingPoint. His division at BearingPoint wasn't among those acquired by Deloitte, but Osborne chose the firm over competitors in part, he says, because he'd seen so many of his own practice leaders jump ship for the firm in prior years. Today, Harrison says, Deloitte typically gets more than 85% of the experienced hires it makes an offer to.
On campus, Sandy Shirai, a Deloitte principal who does a lot of recruiting at her alma mater, Stanford, says students accepting offers tell her it's Deloitte's diversity that attracts them. "Deloitte has an amazingly broad footprint of service and industry we serve. If they don't know exactly what they want to do, Deloitte can be a good place to go," says Shirai. In recent years, Deloitte's acceptance rate at Stanford, one of the top-ranked business programs, has risen, as has the number of students interviewing with the firm.
Big in M&A
Driving the hiring has been the firm's business success. Last year Deloitte ranked No. 2, behind McKinsey, among strategic consulting firms, according to Kennedy Information. Years ago, that wouldn't have been the case for the firm, which was seen as proficient in implementation but less dominant in putting together strategy. Today firms have to do both, says Deloitte's Renjen: "Clients are not only expecting great insight but that it be implementable and that results are generated that are tangible and measurable. It's not just enough to come in with a great idea and submit a report. Clients want to know: How do we implement this and get tangible results?" He says that according to Deloitte's own tracking, the firm has an inordinately high market share in mergers and acquisitions and other deals of more than $5 billion in value, something he attributes to this bottom-line focus.
One example is the $6.7 billion merger of biotech firms Invitrogen and Applied Biosystems in November 2008, which formed Life Technologies (LIFE). Deloitte advised Invitrogen on the deal, starting from the early analysis of the marketplace and models for getting the deal paid for and how an integrated company could be run. Life Technologies' head of global integrations, Mark Smedley, says Deloitte's approach to the deal was "very pragmatic"—heavy on data on benchmarks from the industry and other deals. "The biggest benefit has been their ability to go from strategy to execution. Execution is a bit of a grind. Like sausage making, it's not all that pretty, but the results can be pretty tasty."
That full-service model has helped build Deloitte's business. Revenue rose 12% last year, according to Kennedy Information, which ranks Deloitte globally as the second-largest consulting firm today, slightly smaller than IBM. To maintain that pace, the firm will have to keep up its aggressive hiring.